Landing Ship Medium: Hanwha Wins $269M Navy LSM Order
Hanwha’s Philadelphia yard will build a $269 million Landing Ship Medium for the Marines, the first award under a new Navy contracting model.
The U.S. Navy’s newest amphibious ship program has picked its first shipyard under a contracting model the service has never used for warships before. TOTE Services, the company the Navy hired to manage construction of the Landing Ship Medium (LSM), selected Hanwha Defense USA to build one of the ships at Hanwha Philly Shipyard in Philadelphia, Breaking Defense reported on 30 October. The award is worth $269 million for one ship and includes options for up to three more.
According to Breaking Defense, it is the first shipyard selection made by TOTE as the program’s vessel construction manager and the first U.S. Navy contract for Hanwha Defense USA, the American arm of South Korea’s Hanwha group. TOTE Services president Jeff Dixon said in a statement that the deal “shows the speed at which the VCM model can move from RFP to contract” and secured “build positions that allow construction to start in the fourth quarter of 2027.”
A new way to buy a Navy ship
Under the vessel construction manager (VCM) model, a private company rather than the Navy holds the prime contract and hires and oversees the shipyards. The Navy awarded TOTE that role on 13 July in a $2.2 billion contract covering up to eight LSMs. The Navy directed TOTE to place one ship with Bollinger Shipyards and four with Fincantieri Marinette Marine in Wisconsin, and left TOTE free to choose how to award up to three more. The federal award notice lists the contract as N0002426C2421, with a value of $2,605,075,850 including all options, and says one offer was received.
“The VCM strategy is an innovative shift in Navy shipbuilding,” Will Mahan, performing the duties of assistant secretary of the Navy for research, development and acquisition, said in the July release. He said the five months between the request for proposals and the award cut traditional contracting timelines by nearly half. TOTE, which runs the same model for the Maritime Administration’s National Security Multi-Mission Vessel training ships, a program Hanwha’s Philadelphia yard also builds, said its teaming partners include Leidos Gibbs & Cox and Damen.
The approach comes from Congress. The Congressional Research Service notes that the fiscal 2026 defense authorization act allows a block buy of up to 15 LSMs and directs the Navy, after its first LSM contract, to pick a VCM to manage the purchase of up to eight more. The 2025 reconciliation law provided $160 million for advance procurement and about $1.8 billion for LSM procurement, which CRS says “appears sufficient to procure several LSMs.”
What the ship is for
The LSM, previously called the Light Amphibious Warship, is meant to carry small Marine Corps units between islands and coastlines in the Western Pacific. CRS describes the Marine concept, Expeditionary Advanced Base Operations, as reinforced-platoon-sized units moving from island to island to fire anti-ship cruise missiles and perform other missions in a possible conflict with China. Those missiles include the NMESIS launcher the Marines took to Yonaguni this autumn. The Navy says the LSM fills the gap between short-range landing craft and its large amphibious warships, and plans a 35-ship fleet. CRS gives a planning range of 18 to 35 ships.
The design is the Damen LST-100, from the Dutch shipbuilder, which the Navy picked in December 2025. The trade outlet Defense WarRoom reported that the Navy paid $17 million for the design package. The program had stalled once before: CRS cites a December 2024 USNI News report that the Navy cancelled its first request for proposals after bids came back far above estimates. “We put it out for bid and it came back with a much higher price tag,” then-acquisition chief Nickolas Guertin said at the time. The first ship, LSM-1, is to be named McClung, after Maj. Megan McClung, a Marine officer killed in Iraq in 2006, according to CRS.
Key specs
| Item | Landing Ship Medium (per named source) |
|---|---|
| Design basis | Damen LST-100, selected December 2025 (CRS) |
| Length and beam | 100 m (328 ft) by 16 m (52.5 ft), Damen figures (Defense WarRoom) |
| Displacement | About 4,000 tons (Defense WarRoom) |
| Speed and range | 15 knots; 4,000 nautical miles in Damen’s design, 3,400 nm Navy minimum (Naval News) |
| Cargo | 1,020 square meters of roll-on/roll-off deck; over 500 tonnes of Marines and gear (Defense WarRoom, Naval News) |
| Core crew | 18, Damen baseline (Defense WarRoom) |
| Aviation | Stern deck for helicopters and drones |
| Planned fleet | 35 ships (Navy); 18 to 35 (CRS) |
| Hanwha order | One ship for $269 million, options for three (Breaking Defense) |
| First delivery | 2030 per TOTE; the Navy had said fall 2029 |
The U.S.-specific changes to the Damen baseline, including combat systems, self-defense weapons and survivability features, have not been published, according to Defense WarRoom.
Why it matters
Analysis, based on the sources cited in this article:
The Marine Corps has rebuilt much of its force around small units with anti-ship missiles and amphibious vehicles such as the ACV, but those units need a way to move between islands. The LSM is that link, and each delay to the ship pushes back the concept it supports. The first-delivery date has already slipped from fall 2029, the Navy’s target in July, to 2030 in TOTE’s announcement.
The award also widens who builds Navy ships. Hanwha’s yard would become a third LSM builder alongside Bollinger and Fincantieri. It joins other new entrants, such as Anduril’s planned submarine-parts shipyard, at a time when established yards carry heavy backlogs. Breaking Defense reported that Hanwha Defense USA plans to take a controlling stake in the Philadelphia yard, now owned 60% by Hanwha Systems and 40% by Hanwha Ocean, with retired Rear Adm. Tom Anderson overseeing it. Defense WarRoom ties the award to the $150 billion U.S. shipbuilding investment pledge South Korea made in its 2025 trade deal with Washington; that link is the outlet’s analysis, not a statement by the Navy.
Open questions remain. Defense WarRoom points out that five hulls are already assigned to Bollinger and Fincantieri, so one firm Hanwha ship plus three options would exceed the eight-ship ceiling of TOTE’s contract. Neither TOTE nor Hanwha has explained how that will work. TOTE said it is in “productive contract discussions” with Bollinger and Fincantieri, and Fincantieri Marine Group chief executive George Moutafis said the company wants “a realistic schedule” and “clear requirements.”
What to watch: signed subcontracts with Bollinger and Fincantieri; whether TOTE exercises Hanwha’s three options; LSM quantities and unit costs in Navy budget documents; and the start of construction at Philadelphia in late 2027.
Sources
- Breaking Defense, Navy flexes new acquisition muscles with TOTE’s $269M LSM award to Hanwha, 30 October 2026.
- U.S. Navy, U.S. Navy Announces Award of Vessel Construction Manager Contract to Accelerate Medium Landing Ship Acquisition, 13 July 2026.
- SAM.gov, Medium Landing Ship (LSM) Vessel Construction Manager award notice, N00024-26-R-2421, 13 July 2026.
- Congressional Research Service, Navy Medium Landing Ship (LSM) Program: Background and Issues for Congress, R46374, 13 January 2026.
- Defense WarRoom, Korean-Owned Hanwha Defense USA to Build Its First US Navy Medium Landing Ship for Pacific Marines, 30 October 2026.
Additional sources
- TOTE Services, TOTE Services Awarded VCM Contract to Oversee Medium Landing Ship Construction Program, 13 July 2026.
- Naval News, Hanwha Philly Shipyard Selected to Build US Navy Medium Landing Ship (LSM), 30 October 2026.
Related coverage
- NMESIS anti-ship missile launchers deploy to Yonaguni
- ACV: the Marine Corps’ final Amphibious Combat Vehicle variant
- Virginia-class submarine production and Anduril’s shipyard
